Combined Company will have a Powerful Health Information and Services Exchange for Employers, Benefits Brokers, Hospitals, Healthcare Organizations and Consumers
Ebix Expects the Merger to be Immediately Accretive and Generate 15 cents of Additional Diluted EPS in Year One
ATLANTA--(BUSINESS WIRE)--Ebix, Inc. (NASDAQ: EBIX - News), a leading international supplier of On-Demand software and E-commerce services to the insurance industry, today announced that it has signed a merger agreement with Atlanta based A.D.A.M., Inc. (NASDAQ: ADAM - News), a leading provider of health information and benefits technology solutions in the United States. Ebix will acquire A.D.A.M. on a debt-free basis for aggregate merger consideration of $66 million.
Under the terms of the merger agreement, unanimously approved by both Boards of Directors, A.D.A.M. shareholders will receive 0.3122 of Ebix common stock for each share of A.D.A.M. common stock in a tax-free reorganization, subject to certain adjustments specified in the merger agreement. The exchange ratio of 0.3122 is based on a $19.06 agreed value of Ebix common stock for purposes of the merger agreement. Upon the closing of the transaction, A.D.A.M. shareholders will own approximately 7 percent of the combined company.
Ebix Chairman of the Board, President & CEO Robin Raina said, "This is a move that accelerates our health insurance strategy and that we believe positions us to win by offering even greater value to our customers and partners. In addition to the strategic benefits of combining two highly complementary Atlanta based organizations and product families, we believe we can create substantial shareholder value through significant cost structure improvements and access to new growth opportunities. At a particularly challenging time for the health insurance industry, we believe that this combination vaults the combined company into a powerful role with respect to employers, brokers, carriers and health insurance organizations -- together we expect to shape the health insurance industry for years to come."
Robin added, “We expect the transaction to be accretive in the short and long term both. We expect the merger to deliver at least 15 cents in increased diluted EPS in the first 12 months after closing. This transaction will provide new cross selling opportunities on both sides while helping take A.D.A.M. services across the world. This deal is a strategic step forward to establish Ebix as a Health Information Exchange and is likely to be followed by other strategic steps in coming months and years.”
A.D.A.M. Chairman of the Board, Bob Cramer said, “We are excited to be merging the two companies to create a leading health information and services exchange player in the United States, at a critical time in the health industry. We believe that the combined operations will help our customers by bringing broader solutions to them, leveraging both companies’ commitment to world-class service levels, and because this will reduce the burden of public company costs incurred by Adam on a standalone basis. We believe the merger will allow for continuing investment in developing leading edge products in A.D.A.M.’s core markets.”
The consummation of the Merger is subject to the approval of A.D.A.M. shareholders, customary regulatory approval, including the expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and other customary closing conditions. The transaction is expected to close later this year.
Complementary Strengths and Synergies
LMC Capital served as financial advisors to Ebix while Needham & Company, LLC served as the financial advisors to A.D.A.M., for the transaction.
About A.D.A.M., Inc.
About Ebix, Inc.
With 30+ offices across Brazil, Singapore, Australia, the US, New Zealand, India and Canada, Ebix powers multiple exchanges across the world in the field of life, annuity, health and property & casualty insurance while conducting in excess of $100 billion in insurance premiums on its platforms. Through its various SaaS-based software platforms, Ebix employs hundreds of insurance and technology professionals to provide products, support and consultancy to thousands of customers on six continents. Ebix’s focus on quality has enabled it to be awarded Level 5 status of the Carnegie Mellon Software Engineering Institute’s Capability Maturity Model (CMM). Ebix has also earned ISO 9001:2000 certifications for both its development and BPO units in India. For more information, visit the Company’s website at www.ebix.com.
Information Concerning Forward Looking Statements
Each company’s directors and executive officers and other persons may be deemed, under SEC rules, to be participants in the solicitation of proxies in connection with the proposed transaction. Information regarding A.D.A.M.’s directors and officers can be found in its proxy statement filed with the SEC on April 8, 2010 and information regarding Ebix’ directors and officers can be found in its Annual Report on Form 10-K filed with the SEC on March 16, 2010. Additional information regarding the participants in the proxy solicitation and a description of their direct and indirect interests in the transaction, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.
Aaron Tikkoo, IR